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SECTOR: Agro-chemicals Dhanuka Agritech CMP: Rs 83 Target Price: Rs 113 Rating: BUY

Announcement: Excise Duty has been increased from 10% to 12% Impact: It is a negative development as it will increase the cost of raw materials for the company and in current competitive scenario it would be difficult for the company to pass on the entire incremental burden. We have reduced our FY13E earnings by 3.3%. PI Industries CMP: Rs 520 Target Price: Rs 635 Rating: BUY

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Announcement: Excise Duty has been increased from 10% to 12% Impact: It is a negative development as it will increase the cost of raw materials for the company and in current competitive scenario it would be difficult for the company to pass on the entire incremental burden. However, the impact on PI industries would be less than other agri-input companies as it draws ~40% export revenues from Custom synthesis which is immune from excise duty. The impact of above development is reduction of 1.7% on FY13E earnings SECTOR: Auto Maruti Suzuki CMP: Rs 1373 Target Price: Rs 1333 Rating: Book Profit

Announcement: Increase in Excise duty from 10% to 12% Segment Cars (< 1500 cc , < 4 meters in Length) Cars (< 1500 cc , >4 meters in Length) Cars (> 1500 cc , >4 meters in Length)

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Union Budget 2012-13

Current Excise (%) 10 22 22 + Rs 15,000

New excise (%) 12 24 27

No additional excise duty on diesel passenger cars. Proposal to extend weighted deduction of 200% for R&D expenditure in an in house facility for a further period of 5 years beyond March 31, 2012. Impact: The company has announced that it will pass on the increase in excise duties to the end consumers. Increase in excise duty will marginally impact the sales of the company and thereby the margins. The increase in petrol prices will also impact the sales of the company. Short term impact is neutral. The stock has seen a sharp run up in the past 3 months and has achieved our target price of Rs 1333. We advise to book profit at current levels. However, the stock can be purchased on decline.

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Eicher Motors

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Union Budget 2012-13

CMP: Rs 1890 Target Price: Rs 2070 Rating: Hold and BUY on decline

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Announcement: Increase in Excise duty from 10% to 12%. Building of commercial vehicle chassis were exempt from excise duty but were charged with a flat Rs 10000 duty. This has now been changed to ad valorem rate of 3%. Proposal to extend weighted deduction of 200% for R&D expenditure in an in house facility for a further period of 5 years beyond March 31, 2012. Impact: As the company is a major CV player, increase in excise duty can have a near term impact on the company. We believe that it would be difficult to pass on the price hike on MHCV sector (around 15% of the portfolio. may impact the overall manufacturing costs of auto companies. However the LCV segment is expected to be the least impacted (around 65% of the portfolio) given the strong demand for LCVs and lower price. Increase in excise duty for automotive chassis will have a negative impact on the company In case of two wheeler business of the company, Royal Enfield is a premium brand and the company will pass on the hike to the consumer. Moreover, change in tax slabs will lead to higher income in the hands of individuals which can increase the demand for two wheelers going forward. Overall impact is marginally negative Munjal Showa CMP: Rs 70 Target Price: Rs 97 Rating: BUY

Announcement: Increase in Excise duty from 10% to 12% Impact: Increase in excise duty from 10% to 12% for two wheelers will not have a major effect as the company will pass the price hike to the customers. Moreover, change in tax slabs will lead to higher income in the hands of individuals which can increase the demand going forward. SECTOR: Banking Key announcements: FY13 GDP expected at 7.6% plus or minus 25 bps. FY12 fiscal deficit revised to 5.9% of GDP vs 4.6% target. Fiscal deficit at 5.1% of GDP in BE 2012-13. Inflation is expected to moderate going forward. Allocation of Rs 15,888 crs for recapitalization of PSU banks in FY13. Proposal to allow individual tax payers, a deduction of upto Rs 10,000 for interest from savings bank accounts. Dena Bank CMP: Rs 93 Target Price: Rs 114 Rating: BUY on decline

Impact: Dena bank has a CAR of 11.6% with Tier I ratio of 8.54% excluding the ploughed back profit. However, we believe that Dena Bank will not be requiring additional fund from the government in the near term as the recent 5% stake by LIC ensures that the bank is adequately capitalized. Higher GDP growth and lower fiscal deficit is overall positive for the bank. No major direct impact.

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Bajaj Finance

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Union Budget 2012-13

CMP: Rs 787 Target price: Rs 806 Rating: HOLD & BUY on decline

Announcement: No Key announcement made Impact: Neutral Yes Bank CMP: Rs 367 Target Price: Rs 342 Rating: BUY on decline

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Announcement: Proposal to allow individual tax payers, a deduction of upto Rs 10,000 for interest from savings bank accounts. Impact: Deduction of upto Rs 10000 for interest from savings bank accounts will help the bank to generate higher CASA as the bank already provides higher interest on savings account (7%). We had recommended to book profit on the stock. However, Yes Bank is a quality stock and so we advise to BUY on decline for a long term perspective DCB CMP: Rs 46 Announcement: No Key announcement made Federal Bank CMP: Rs 428 Target Price: Rs 497 Rating: HOLD & BUY on decline Target Price: Rs 65 Rating: BUY

Announcement: No Key announcement made ING Vysya CMP: Rs 336 Target price: Rs 491 Rating: BUY

Announcement: No Key announcement made SECTOR: Capital Goods and Infra KEC International Ltd. CMP: Rs 64 Target price: Rs 74 Rating: Hold

Announcement: Increase in Excise duty from 10% to 12% ECBs allowed to part finance rupee debt of power projects Coal for thermal power companies exempted from customs duty Impact: Increase in excise duty will be passed on by the company. Allowance of ECB for power projects will be beneficial for power companies as they will be able to raise debt at a lower rate through ECB. Exemption of import duty on coal and extension of sunset clause for power sector will have a positive impact on the overall sector. This will have a cascading positive impact on KEC International Ltd. Sterlite Technologies Ltd. CMP: Rs 41 Target price: Rs 47 Rating: Hold

Announcement: Increase in Excise duty from 10% to 12% ECBs allowed to part finance rupee debt of power project Coal for thermal power companies exempted from customs duty

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Extension of sunset date on tax holiday fro transmission & distribution business Impact: Approximately Rs. 800-900 cr worth of current order book is on fixed price contracts and will be affected by way of increase in the raw material prices due to increase in excise. The impact could be in the range of Rs. 8-10 cr which will negatively impact FY13E EPS by 3.2%. Neutral.

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Apar Industries Ltd.

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Union Budget 2012-13

CMP: Rs 145

Target Price: Rs 153

Rating: Hold

Announcement: Increase in Excise duty from 10% to 12% ECBs allowed to part finance rupee debt of power project Coal for thermal power companies exempted from customs duty Impact: Increase in the excise duty will be passed on to the customers as part of cost variation clause. No major impact on the company. Neutral. JMC Projects Ltd. CMP: Rs 123 Target Price: Rs 183 Rating: Buy

Announcement: NHDP allocation increased by 14% to Rs. 25,360 cr in FY13 with a target to achieve 8800 km of road projects. Foreign borrowing allowed on capex for maintenance & operation of toll roads To allow Rs. 10000 cr for NHAI tax free bonds FY13 Increase in excise duty from 10% to 12% Impact: Overall positive for the company. The company has no plans of raising ECBs this year. Increase in the excise duty will be passed on to the customers as part of cost variation clause. Tecpro Systems Ltd. CMP: Rs 168 Target Price: Rs 275 Rating: Buy

Announcement: Fuel supply agreements to be signed by Coal India with power producers for projects that would get st commissioned on or before 31 March 2015 Coal for thermal power companies exempted from customs duty Impact: It will have a positive impact on power generation projects and will have a cascading positive impact on Tecpro Systems who specializes on coal handling equipment. SECTOR: Cement Heidelberg Cement CMP: Rs 36 Target Price: Rs 45 Rating: BUY

Announcements: The government has increased the excise duty for cement manufacturers from 10% ad valorem +Rs 160/bag to 12% ad valorem +Rs 120/bag. Earlier the excise duty of 10% was calculated based on transaction value (retail sales price adjusted for dealer margin, VAT and specific excise duty). Now it is proposed to calculate the excise duty of 12% on retail sales price less 30% of abatement. The combined effect is likely to be Rs 20/ton. The government has announced the reduction of import duty on steam coal from 5% to nil for a period of st next two years (till 31 March, 2014).

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Havells

Impact: Positive

SECTOR: Consumer Durables CMP: Rs 579 Target Price: Rs 539 Rating: Book Profit

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Announcement: Excise duty increased from 10% to 12% Impact: The companies are expected to take price hike in order to pass on the increase in excise duty to user. Neutral for Havells, Bajaj Electricals and V Guard Industry Excise duty on LED lamps is being reduced to 6% Impact: Positive Bajaj Electricals CMP: Rs 181 Target Price: Rs 210 Rating: Hold the end

Announcement: Excise duty increased from 10% to 12% Impact: The companies are expected to take price hike in order to pass on the increase in excise duty to user. Neutral for Havells, Bajaj Electricals and V Guard Industry Excise duty on LED lamps is being reduced to 6% Impact: Positive V Guard CMP: Rs 186 Target Price: Rs 231 Rating: BUY the end

Announcement: Excise duty increased from 10% to 12% Impact: The companies are expected to take price hike in order to pass on the increase in excise duty to user. Neutral for Havells, Bajaj Electricals and V Guard Industry Excise duty on LED lamps is being reduced to 6% Impact: Positive SECTOR: FMCG ITC CMP: Rs 216 Target Price: Rs 230 Rating: Hold & BUY on decline the end

Announcement: Government increased basic excise duty on cigarettes of more than 65mm length by adding an ad valorem component of 10 per cent to the existing specific rates. The ad valorem duty would be chargeable on 50 per cent of the Retail Sale Price declared on the pack. Impact: As anticipated by industry experts, the excise duty has been raised by 15%. We believe ITC has enough pricing power to pass on excise duty hikes that are in the normal course of business without impacting its

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Union Budget 2012-13

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earnings. We have already factored in the rise of excise duty in our estimates. Hence, this will result in no change in earnings. CMP: Rs 122 Target Price: Rs 155 Rating: BUY

Radico Khaitan

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Announcement: The excise duty increased by 2% Impact: We were expecting a higher increase in excise duty but in the budget it was hiked by 2%. According to the management, the increase in excise duty will have an impact of Rs. 4-5 cr which the management is confident of passing it on to the end user. Hence, this will result in no change in earnings. SECTOR: Information Technology Redington India CMP: Rs 90 Target Price: Rs 109 Rating: HOLD

Announcement: Allocation of Rs.14232 crores (13% higher) in FY13E reinforces UID Aadhaars gravity and removes fears of the project getting scrapped. Impact: Positive KPIT CMP: Rs 83 Target Price: Rs 94 Rating: HOLD

Announcement: Removal of MAT levy (18.5%) on SEZ Developers and Units was expected. However, no announcement in this regard was made and the impact would be Neutral for KPIT Info since we had not factored it into our projections. Polaris Software CMP: Rs 167 Target Price: Rs 190 Rating: HOLD

Announcement: Removal of MAT levy (18.5%) on SEZ Developers and Units was expected. However, no announcement in this regard was made and the impact would be Neutral for Polaris since we had not factored it into our projections. Persistent Systems CMP: Rs 313 Target Price: Rs 409 Rating: BUY

Announcement: Removal of MAT levy (18.5%) on SEZ Developers and Units was expected. However, no announcement in this regard was made and the impact would be Neutral for Persistent since we had not factored it into our projections. Take Solutions CMP: Rs 34 Target Price: Rs 44 Rating: HOLD

Announcement: Removal of MAT levy (18.5%) on SEZ Developers and Units was expected. However, no announcement in this regard was made and the impact would be Neutral for Take Solutions since we had not factored it into our projections.

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Union Budget 2012-13

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SECTOR: Metals IMFA CMP: Rs 346 Target Price: Rs 421 Rating: HOLD

Announcement Excise duty increased from 10% to 12% Impact: As per industry expectation, the excise duty was hiked by 2%. IMFA generates 75-80% of revenue from exports where the hike in excise duty is not applicable. The balance revenue comes from domestic market which will bear some impact if the company is not able to pass it on to the customers. Marginal Negative to IMFA Export Duty on chromium ore has been enhanced from Rs. 300/- per ton to 30% Impact: IMFA will not have any impact as it has captive rights for its chrome ore mines. SECTOR: Pharmaceuticals Ajanta Pharma CMP: Rs 455 Target Price: Rs 545 Rating: Buy on Declines

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Announcements: Excise Duty has been increased from 10% to 12% Impact: The company has 60% exports and as a result it is currently paying net excise duty of 1% on its consolidated gross sales. A 2% increase in the basic rate would not have any impact on the financials of the company. Ajanta Pharma also has the pricing power through which it can pass on the impact, if any. Extension of weight average reduction on in-house Research and Development Impact: It is positive for the sector in general and for Ajanta Pharma in particular as it encourages companies to spend more on R&D for the benefit of mankind and for their future growth. Ajanta Pharma spends 5% of revenues on R&D. Removal of cascading effect of Dividend Distribution Tax on Dividends from foreign subsidiaries Impact: There is no effect of the above announcement on Ajanta Pharma as it is not receiving dividends from foreign subsidiary. MAT on partnerships and other form of originations Impact: The above announcement would impact big Pharma companies as they have formed partnership firms in tax free zone and were paying lower tax on that. But, now they have to pay higher tax which would impact their earnings. However, it wont have any impact on Ajanta Pharma NRHM increased from Rs 18,115 cr to Rs 20,822 cr Impact: Sentimentally positive for the company and for the sector

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Union Budget 2012-13

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SECTOR: Others Astral Polytechnik Ltd CMP: Rs 188 Target Price: Rs 226 Rating: HOLD

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Announcement: No major announcements were made for the Housing sector. However, Excise Duty is increased from 10% to 12%. The company derives some part of its revenues from the tax exempted region and the rest the company would be able to pass it to its customers. Impact would be Neutral for the company.

Disclaimer: This Document has been prepared by Nirmal Bang Research (A Division of Nirmal Bang Securities PVT LTD). The information, analysis and estimates contained herein are based on Nirmal Bang Research assessment and have been obtained from sources believed to be reliable. This document is meant for the use of the intended recipient only. This document, at best, represents Nirmal Bang Research opinion and is meant for general information only. Nirmal Bang Research, its directors, officers or employees shall not in any way be responsible for the contents stated herein. Nirmal Bang Research expressly disclaims any and all liabilities that may arise from information, errors or omissions in this connection. This document is not to be considered as an offer to sell or a solicitation to buy any securities. Nirmal Bang Research, its affiliates and their employees may from time to time hold positions in securities referred to herein. Nirmal Bang Research or its affiliates may from time to time solicit from or perform investment banking or other services for any company mentioned in this document.

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Nirmal Bang Research (Division of Nirmal Bang Securities PVT LTD) B-2, 301/302, Marathon Innova, Opp Peninsula Corporate Park Off Ganpatrao Kadam Marg Lower Parel (W), Mumbai-400013 Board No. : 91 22 3926 8000/8001 Fax. : 022 3926 8010

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